State Highway Account (SHA) Loan Program Highlights

Purpose:

Assembly Bill (AB)
1012, (Torlakson) Chapter 783, Statutes of 1999 authorized the use of unallocated
funds in the State Highway Account (SHA) for the purpose
of making short-term loans to advance the capital
improvement phase of State Transportation Improvement
Program (STIP) eligible projects that are included
within an adopted Regional Transportation Plan (RTP).

Eligibility:

Transportation Planning Agencies,
County Transportation Commissions, Transit Districts,
City and County Governments, and Local Transportation
Authorities are eligible to apply for a loan under
this program. Loans are subject to the provisions
of Article XIX of the California Constitution.

Funding:

By January 15 and July 15 of each
year, the California Transportation Commission (CTC)
must adopt projections regarding the availability
of funds to be loaned and the period of time during
which funds will be available.

With the exception of those requests
which would exceed program capacity, loans will be
considered for approval on a first-come, first-served
basis whenever the State Highway Account cash balance
is greater than $400 million.

The maximum amount of funds that
may be loaned for one or more projects to any single
county in any single loan must be not more than 50
percent of the most recent regional-choice funding
allocation, in an amount not to exceed $100 million.

Requirements:

An agency applying for a loan must
be the approving authority for the county's submission
to the STIP, unless the agency applies jointly with
the approving authority.

Projects must be STIP-eligible and
included in an adopted RTP, and must comply with California
Environmental Quality Act (CEQA) requirements.

Total project costs must be greater
than $10 million. In counties with populations under
500,000, the CTC may waive this requirement if 50
percent of the county's share for the current county
share period is equal to, or greater than, the amount
to be loaned.

A fiscal assessment of the applicant's
ability to repay a loan must be made by an independent
fiscal consultant, selected by the applicant from
a pre-qualified list approved jointly by Caltrans
and the CTC. The applicant must incur the cost of
this assessment.

Applicants must certify that other
resources are not available to fund the project and
that the applicant does not intend to create an indirect
arbitrage situation. An indirect arbitrage situation
would be created by banking or investing the loaned
funds at a higher yield than the State of California's
Pooled Money Investment Account (PMIA) Earnings Yield Rate in effect
while the monies are borrowed.

Interest rates on loans will be set
at the rate paid on money in the PMIA during the period
of time that the money is loaned. A history of the
PMIA Earnings Yield Rates can be found at the California State
Controller's Office website at: http://www.sco.ca.gov

Projects must be under construction
no later than six months after the date the loan funds
are transmitted.